EXCLUSIVE: Freeland will eliminate GST on new homes for young Canadians if she forms government: source

Liberal MP Chrystia Freeland answers questions from journalists in the West Block on Parliament Hill in Ottawa, on Thursday, Jan. 23, 2025. THE CANADIAN PRESS/Justin Tang

Liberal leadership candidate Chrystia Freeland is set to announce a cut to the goods and services tax (GST) for first-time homebuyers if she becomes the next prime minister, according to a source close to the former finance minister’s campaign.

CTV News has learned the announcement will be made Tuesday as Freeland lays out a series of measures to address the cost-of-living crisis in this country.

Freeland’s proposed GST relief would apply to homes worth up to $1.5 million and could save young Canadians as much as $75,000 on the purchase of their first home, the source told CTV News.

The measure is the latest policy plan the former finance minister and deputy prime minister has unveiled in the shortened leadership race, which concludes on March 9.

Fellow Liberal leadership candidate Karina Gould already announced a three-pillar housing plan last week centred around the goals of reducing or eliminating homelessness, increasing housing supply and supporting first-time homebuyers.

Gould’s plan includes expanding on the First-Time Home Buyer Incentive (FTHB), which was discontinued in March of 2024.

The proposal put forth by Gould would have increased the percentage offered through the FTHB for a down payment from 10 per cent to 50 per cent, while also offering a tax credit of $2,000 on the provincial land transfer tax for first-time homebuyers.

Gould is also proposing building modular homes that are climate resilient and cheaper as part of a larger industrial housing strategy.

Last October, Conservative Leader Pierre Poilievre promised a Conservative government would get rid of the federal sales tax on all new homes worth up to $1 million. He also called on premiers to eliminate the provincial sales tax on these new homes.

Conservatives estimate their measure could save homebuyers $50,000 on a home that costs up to $1 million.

Housing affordability has been a key issue for many voters. A November report from Statistics Canada shows nearly half (45 per cent) of Canadians reported being “very concerned about housing affordability” because of the rising costs of housing or rent.